Jatin Khan is a film producer, and he is currently evaluating a script by a new

screenwriter and director, Lata Jain. Jatin knows that the probability of a film by a

new director being a success is about $\mathrm{.}10$ and that the probability it will flop is $\mathrm{.}90.$

The studio accounting department estimates that if this film is a hit, it will make

Rs$.2500$ million in profit, whereas if it is a box office failure, it will lose Rs$.800$ million.

Jeffrey would like to hire noted film critic Kay Mohata to read the script and assess

its chances of success. Kay is generally able to correctly predict a successful film

$70\%$ of the time and correctly predict an unsuccessful film $80\%$ of the time. Kay wants

a fee of Rs$\mathrm{.}100$ million. Determine whether Kay should be hired, the strategy Jatin

should follow if Kay is hired, and the expected value.

Your answer should include a graphical presentation of the decision problem. What

is the expected value of sample information?